retirement funds questions

L1: retirement funds questionsI am retiring March 2008 with my 30 year pension. I need some help/suggestions on what I need to do with the funds I”ll have in order to get the monthly income I need to survive. My estimates are as follows: 100k in Fidelity 401k, 100k in TRowePrice 401K, 200K in savings (mutuals funds and stocks) and 350k in Pension Lump Sum Payout for a total of around 750k. I am needing 3k a month to live on plus whatever my taxes on this 36K per year will be. I will be 49 years old when I retire. Thanks in advance for your suggestions/advice. TB2007-04-02 09:21, By: timbob96, IP: [69.29.98.180]
L2: retirement funds questionsTB,
The reverse calculator on this site shows a beginning balance of $637,786.04 needed to support annual SEPP withdrawals of $41,400 starting at age 49, using a Fed Mid Term max rate of 5.5% (as an estimate of what might be available next year.. it could be lower, and that would yield smaller payments). I added 10% fed taxand 5% state tax to the $36K to get $41,400 gross. Since part of your money is not able to be rolled into IRA”s for the SEPP(the $200k in savings) it looks like the most you could aggregate into an IRA by rollovers is about $550k. I went back to the calculator and told it you only needed $36K per year (assuming you would pay the taxes from the investment account) and a starting balance of $554,596.56 with same 5.5% estimated rate and single life Amortization would do it. You may have that much by next year. Play with the reverse calculator to see what other options are available. Keep in mind if you make bad investments over the next 10–12 years, you could wipe out most of your nestegg. I just used regular calculator with the $554K and a 0% growth rate (actual investment rate) on your investments, and you only have $158k when the SEPP plan ends at 59.5. With an “actualinvestment rate” (per year) of 3%, you would have $292k left at age 59.5With an actual investmentrate of 5%, you would have $411k left. Plug in other numbers in both the reverse and the regular calculator..and play with them.
The problem with these scenarios is that you have to maintain this program for about 11.5 years, and the only backup money you have is the $200k in your investment account. I am assuming you have some kind of med plan figured out that won”t cost you $13-15K per year when you are retired but under 65. Spend lots of time reading the posts on this site to get better insights into the 72(t) and SEPP plans before you try to do one.
Hope this helps. KEN
2007-04-02 13:46, By: Ken, IP: [151.199.44.76]